Congress is in session this week. Here's a link to the week in review up on Capitol Hill.
The WSJ Pharmalot blog discusses another very expensive specialty drug called Kalydeco which treats cystic fibrosis. The drug's manufacturer Vertex Pharmaceuticals charges around $300,000 a year for the drug. Arkansas Medicaid is requiring Medicare beneficiaries suffering from this disease to try less expensive drugs before resorting to Kalydeco. A 14 year old girl with cystic fibrosis, which is a rare genetic disease, is suing the Medicaid Program. Vertex claims that its hands are tied by the Medicaid rules -- no special treatment for this girl. Note that if Vertex lowers the cost of the drug for Medicaid, it will wind up lowering the cost of all payers because Medicaid pricing is the floor price for brand name drugs.
The drug manufacturer's trade association Phrma defends these unconscionable pricing policies here.
The shift from managing a condition to being able to cure it has already occurred for hepatitis C patients. The disease affects nearly three million Americans today who face high medical costs if the infection is left untreated. New and forthcoming treatments have sparked controversy with their high price tag of approximately $1,000 per pill. When considering the $600,000 bill for a liver transplant or the $85 billion combined annual medical costs for all hepatitis C patients projected by 2034, however, the cost doesn’t seem so off base. Additionally, solely looking at the cost of the medicine, fails to account for the invaluable increase in lifespan and quality of life that patients gain from these innovative new medicines.Why Phrma's argument is facially appealing, the bottom line is that Gilead Sciences which makes the Sovaldi Hepatitis C drug recovered its research and development costs from the first quarter of Sovaldi sales -- over $2 billion according to the NY Times. The drug manufacturers need to come to their senses fast. With this attitude there will never be cost savings from medical advances. Gilead reports its second quarter 2014 earnings on Wednesday July 23.